[2023] KEHC 25372 (KLR)

Langer v Mutambu & another (Civil Case 303 of 2011) [2023] KEHC 25372 (KLR) (Commercial and Tax) (17 November 2023) (Ruling)

Neutral citation: [2023] KEHC 25372 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Civil Case 303 of 2011

EC Mwita, J

November 17, 2023

Between

Hans Jurgen Langer

Plaintiff

and

Joe Musyimi Mutambu

1st Defendant

Mercbima International (K) Limited

2nd Defendant

Ruling

1. The defendants filed a notice of motion, dated 5th May 2021 seeking to set aside the ex parte Judgment entered on 25/7/2019 and leave to defend.

2. The application is premised on grounds that although the defendants entered appearance and filed a defence, they did not attend court for the hearing on 18th June 2019 because they were not aware of the hearing date.

3. According to the defendants, their advocates then on record (M/s Kyalo Mwengi & Co. Advocate) did not notify them of the hearing date and as a result they did not attend court. The defendants stated that as at 23rd October 2014 their advocates’ offices were still based at View Park Towers, Utalii Street and only relocated to Hughes Building on Muindi Mbingu Street in November 2018.

4. The defendants asserted that due to their advocates’ mistake, judgment was entered against them and they faced the risk of execution as the respondents had instructed auctioneers to execute the decree issued against them for Euros 651,943. 56.

5. The defendants argued that the judgment obtained against them was irregular and should be set aside. They also argued that notice of entry of judgment was not served on them to afford them an opportunity to appeal or apply for review of that judgment.

6. The defendant further stated that the application had been brought without undue delay and that the plaintiff would not suffer prejudice if the application was allowed. They however stood to suffer great prejudice if the judgment was not set aside and execution was allowed to proceed.

7. The defendants called for aid, article 159(2) (a) and (d) of the Constitution and sections 1A (1) and 1B (1) (a) of the Civil Procedure Act that regardless of the technicalities, it is just for the Court to allow their application so that they are not condemned unheard.

8. The defendants faulted the plaintiff for failing to disclose to Court that they [defendants] had filed a suit (HCCC No. 824 of 2010) before the same court, between the same parties and over the same claims.

9. The defendants took the view, that there was no basis for the plaintiff’s contention that there is conflict of interest since Mr. Robert Asembo did not represent the plaintiff in a bribery case or cyber-crime criminal case.

10. The defendants relied on Order 10 rule 11 of the Civil Procedure Rules that the court may set a side or vary judgment and any consequential orders on terms that are just. The defendants again relied on the Patel v E A Cargo Handling Services Ltd [1974]E A 75 that there are no limits or restrictions on the judge’s discretion to set aside or vary an exparte judgment.

11. The defendants again relied on Shah v Mbogo [1967] E A 166 that the discretion to set aside an exparte judgment is intended to be exercised so that to avoid injustice or hardship.

12. The defendants further cited the decision in Mungai v Gachuhi & another [2005]eKLR that a decision is final only when a proper hearing has taken place.

Response 13. The plaintiff opposed the application through a replying affidavit and written submissions. The plaintiff stated that despite efforts to have the suit heard expeditiously, the defendants’ advocates were unavailable for the fixing of hearing dates. When they failed to appear, his advocates served them with Hearing Notices and filed affidavits of service. He continuously followed up the case and travelled from Germany to attend the hearings but the case never took off.

14. The plaintiff’s advocates raised concerns with the court that the suit was taking too long to conclude and the defendants’ advocates were again invited to fix a hearing date but did not attend. They were served with a hearing notice and an affidavit of service was filed.

15. On the hearing date, neither the defendants nor their advocates attended court. The case proceeded to hearing and on 25th July 2019 the court delivered judgment allowing the suit.

16. The plaintiff contended that the defendants filed this application on 5th May 2021, more than one year and eight months after the judgment had been delivered an inordinate delay. The plaintiff also faulted the defendants for failing to inform the Court of the status of HCCCNo. 824 of 2010 they said they had filed.

17. The plaintiff argued that the firm of M/s Asembo & Co. Advocates having previously represented him, was improperly on record due to conflict of interest. Their Entering into the matter without leave or consent of the defendants’ previous advocates was also irregular and against Order 9 rule 9 of the Civil Procedure Rules.

18. The plaintiff asserted that the judgment is regular and he should be allowed to enjoy the fruits of the judgment. He relied on Order 12 rules 2(a) and 7 of theRules that he was entitled to proceed with the hearing ex parte since the defendants had been served with a hearing notice.

19. The plaintiff also relied on the decision in Josphat Nderitu Kariuki v Pine Breeze Hospital Ltd (Civil Suit 223 of 2005) [2006] eKLRthat the defendants had not given sufficient explanation for their failure to attend court. Their advocates should thus bear the consequences of their professional negligence for failure to attend court on behalf of their clients.

20. The defendant again relied on Lucy Bosire v Nyankoni Manga (ELC 211 of 2009) [2016] eKLR, that it was the defendants’ responsibility to follow up their case. They cannot lay the blame on their previous advocates.

21. Reliance was further placed onJosphat Muthui Muli (Industrial Cause No. 1224 of 2012) [2014] eKLR, that the court’s discretion to set aside an ex parte judgment is intended to be exercised to avoid injustice or hardship resulting from accident, inadvertence, or excusable mistake or error, but not to assist a person who has deliberately sought (whether by evasion or otherwise) to obstruct or delay the cause of justice.

22. The plaintiff cited brahim Mungara Mwangi v Francis Ndegwa Mwangi [2014] eKLR and Water Parnters International v Benjamin K’oyoo T/A Group of Women in Agriculture – Kochieng (Gwako) Ministries (Civil Case No. 105 of 2010) [2014] eKLR, that the application had been brought after an inordinate delay.

23. The plaintiff further citedJackline Wakesho v Aroma Café (Cause No. 212 of 2013) [2014] eKLR that the defendants’ non-compliance with Order 9 rule 9 rendered the proceedings incompetent.

Determination 24. I have considered the application, the response and arguments by parties. I have also considered the decisions relied on in support of the parties’ respective positions.

25. The defendants’ reason for seeking to set aside the exparte judgment is that they were not aware of the hearing date. According to the defendants, their then advocates M/s Kyalo Mwengi & Co. Advocate did not inform them of the hearing date. That was the reason why they failed to attend court.

26. The defendants also argued that their advocates’ mistake caused the plaintiff to obtain judgment and decree against them for Euros 651,943. 56 which was irregular and should be set aside so that they can have their day in court. The defendants again argued that notice of entry of judgment was not served on them as required by the rules.

Whether the judgment is irregular 27. The defendants’ argument is that the judgment entered against them is irregular and should be set aside ex debito justitiae: as a matter of right.

28. Whether a judgment is regular or irregular is a matter of fact to be determined from the circumstances of the case. The Court of Appeal has addressed the distinction between a regular and irregular judgment in several decisions.

29. InJames Kanyita NderituvMaries Philotas Ghika & Another [2016] eKLR, the Court stated that:In a regular default judgment, the defendant will have been duly served with summons to enter appearance, but for one reason or another, he had failed to enter appearances or to file defence, resulting in default judgment. Such a defendant is entitled, under Order 10 Rule 11 of the Civil Procedure Rules, to move the court to set aside the default judgment and to grant him leave to defend the suit. In such a scenario, the court has unfettered discretion in determining whether or not to set aside the default judgment, and will take into account such as the reason for the failure of the defendant to file his Memorandum of appearance or defence, as the case may be, the length of time that has elapsed since the default judgment was entered; whether the intended defence raises triable issues; the respective prejudice such party is likely to suffer.

30. The court then stated regarding an irregular judgment that:[J]udgment will have been entered against a defendant who has not been served or properly served with summons to enter appearance. In such a situation, the default judgment is set aside ex debito justitiae, as a matter of right. The court does not even have to be moved by a party once it comes to its notice that the judgment is irregular, it can set aside the default judgment on its own motion. In addition, the court will not venture into considerations of whether the intended defence raises triable issue. Or whether there has been inordinate delay in applying to set aside the irregular judgment. The reason why such judgment is set aside as of right, and not as a matter of discretion, is because the party against whom it is entered has been condemned without notice of the allegations against him or an opportunity to be heard in response to those allegations. The right to be heard before an adverse decision is taken against a person is fundamental and permeates our entire justice system.

31. In Bouchard International (Services) Ltd v M’mwereria [1987] KLR 193, the Court of Appeal held that:The basis of approach in Kenya to the exercise of the discretion to be employed or rejected under either Rule 8 or Rule 10 (the latter dealing with judgement by default) is that if service of summons to enter appearance has not been effected, the lack of an initiating process will cause the steps taken to set aside ex debito justitiae. If service of notice of hearing or summons to enter appearance has been served, then the court will have before it a regular judgement which may yet be set aside or varied on just terms. To exercise this discretion is a statutory duty and the exercise must be judicial…

32. The Court went on to state that:A judge has to judge the matter in the light of all the facts and circumstances both prior and subsequent and of the respective merits of the parties before it would be just and reasonable to set aside or vary the judgement, if necessary, upon terms to be imposed.

33. The decisions are clear that in a regular judgment, a defendant will have been properly served but for some reason, he failed to enter appearance of file a defence. In such a case, the court still has wide discretion to set aside the judgment on terms that are just.

34. An irregular judgment will have been obtained without service or proper service on the defendant. Such a judgment will be set aside as a matter of right and the defendant granted unconditional leave to defend.

35. I have perused the record in this matter. The suit was filed on 14th July 2011 but did not take off until 18th June 2019. On that day, the plaintiff was present in court but the defendants and their advocate were not. The suit proceeded to hearing and judgment was delivered on 25th July 2019, which the defendants argue was irregular.

36. Order 12 rule 2 of the rules provides that if on the day fixed for hearing, after the suit has been called out for hearing outside the court, only the plaintiff attends, and if the court is satisfied that notice of hearing was duly served, it may proceed ex parte.

37. On 18th June 2019 when the suit came up for hearing, the court was informed that the defendants’ advocates had been served and upon satisfying itself of the service, the court proceeded to hear the suit.

38. The record shows that the defendants had been served with summons, entered appearance and filed a defence. Their advocate was also served with a hearing notice but both the defendants and their advocate failed to attend court for the hearing of the case. Failure to attend court, though served, did not make the judgment resulting from the exparte hearing irregular. It is therefore this court’s finding that the judgment entered against the defendants was a regular judgment.

Whether to set aside 39. The next issue is whether to set aside the exparte judgment. The court having determined that the judgment was regular, whether or not to set aside the judgment is an exercise of discretion which should be done on terms that are just. That is; this discretion like all other discretions, must be exercised judiciously.

40. In Shanzu Investments Ltd v Commissioner of Lands [1993] eKLR, the court delivered itself thus:The jurisdiction to vary judgment being a judicial discretion should be exercised judicially; and, as is often said, whether judicial discretion should be exercised or withheld in a party’s favour, depends, on a large measure, on the facts of each particular case. The tests for the exercise of this discretion are these: - First, was there a defense on the merits? Secondly, would there be any prejudice? Thirdly, what was the explanation for any delay.

41. In Shabir Din v Ram Parkash Anand (1955) 22 EACA 48 BriggsJA stated at page 51:I consider that under Order IX rule 20, the discretion of the court is perfectly free, and the only question is whether upon the facts of any particular case it should be exercised. In particular, mistake or misunderstanding of the appellant's legal advisers, even though negligent, may be accepted as a proper ground for granting relief, but whether it will be so accepted must depend on the facts of the particular case. It is neither possible nor desirable to indicate in detail the manner in which the discretion should be exercised.

42. In Yooshin Engineering Corporation v Aia Architects Limited (Civil Appeal E074 of 2022) [2023] KECA 872 (KLR) (7 July 2023) (Judgment), the Court of Appeal reiterated that:[E]ven where the judgement is regular, the court still retains the wide discretion to set the same aside though if the Court decides to set aside the judgement, depending on the circumstances, it may do so on conditions that are just. That discretion, being wide, the main concern is for the court to do justice to the parties, and in so doing the court will not impose conditions on itself to fetter the wide discretion given to it by the rules. It has however to ask itself under what conditions, if any, it ought to set aside the judgement and such conditions, if appropriate, must be just to both the Plaintiff and the Defendant.

43. The decisions affirm that the discretion of the court to set aside a regular exparte judgment is wide but the discretion must be exercised judicious and any conditions to be imposed must be just to both parties, the plaintiff and the defendant.

44. I have gone through the record which shows that although judgment was entered on 25th July 2019, this application was only filed in May 2021, almost two years after the suit had been heard. The defendants, apart from stating that they were not informed of the hearing date, did not attempt to explain why they made no effort to find out from their advocates the status of their case. In other words, the defendants did not explain the delay in filing the application to set aside the judgment.

45. Even though the defendants again stated that their advocates then on record had not moved office when some letter was sent to them, that argument would not be relevant in this application. The issue here is why the defendants did not attend court and whether the exparte judgment should be set aside.

46. As already alluded to, this court’ discretion to set aside a regular exparte judgment though wide, must be exercised judiciously and for good reason. In this regard, it was the defendants’ duty to show that the circumstances they were relying on to seek to set aside the judgment were persuasive and that their failure to attend court was excusable.

47. I have perused the affidavit of service by Benson Mutinda sworn on 12th June 2019. The process server served a hearing notice on the defendant’s Advocates which was received and stamped. The defendants did not explain why they did not take steps to find out from their advocates the status of their case even if the advocates had not informed them of the hearing date. The defendants only woke up after the plaintiff moved to execute the judgment almost two years after the case had been heard, to persuade the court to exercise its discretion in their favour.

48. Regarding the defendants’ argument that notice of entry of judgment was not served, the defendants must have had in mind Order 22 rule 6 which states that where judgment in “default of appearance or defence” has been entered against a defendant, no execution by payment, attachment or eviction should issue unless not a notice of not than ten days notice of the entry of judgment has been served on him personally, and a copy of that notice is filed with the first application for execution.

49. It is plain from the rule that the notice is to be served where judgment is entered in default of appearance or defence. The rational for requiring service of a notice is to make the defendant aware of entry of judgment against him and the impending execution so that to obviate being taken by surprise. The defendant may take steps to challenge the default judgment in the event he disputes service of summons or even opt to pay to avert the impending execution.

50. Where appearance was however entered and a defence filed, like in this case, execution of the judgment entered after the exparte hearing of the case, (in the absence of the defendant), does not require service of the notice for entry of such judgment.

51. Flowing from my analysis above and after a careful consideration of the application, arguments by parties and on perusing the defence, the conclusion I come to is that the defendants have not satisfied this Court that they deserve this court’s discretion to set aside the regular exparte judgment entered against them.

52. I have perused the defence and, in my view, the defence is a mere denial that does not raise triable issues to call for leave to defend. The contention that there was another suit between the same parties over the same issue would not be a ground for setting aside a regular judgment since the defendants did not disclose to this Court what became of that suit.

53. Taking into account all the circumstances surrounding this case, I find this application unmeritorious. Consequently, the application is declined and dismissed with costs.

DATED SIGNED AND DELIVERED AT NAIROBI THIS 17TH DAY OF NOVEMBER 2023. E C MWITAJUDGE